Sun Hung Kai Properties
Sun Hung Kai Properties is one of Hong Kong’s largest property groups, with revenue of HK$68.4 billion in the 2011-2012 financial year, and profit attributable to shareholders of HK$43.08 billion. The company has been shaken in recent years by disputes between family members, with chairman and chief executive Walter Kwok being forced to step down in a dispute with his brothers Thomas and Raymond. In March, the Independent Commission Against Corruption (ICAC) arrested senior officials as part of a corruption probe that also included former chief secretary Rafael Hui.
Walter Kwok puts faith in original family trust deal
Ousted chairman Walter Kwok Ping-sheung yesterday challenged his mother Kwong Siu-hing's power to remove him as a beneficiary of a family trust that controls the HK$246.6 billion Sun Hung Kai Properties empire. 'My mother is just a protector of the family trust. A protector should act in compliance with the agreement between parties,' said Kwok.
He said he signed a document with his younger brothers, Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, before the relationship turned sour in 2008. Under that agreement, the trio agreed each had a one-third stake in the family trust - HSBC Trustee. It owns 42.42 per cent of Sun Hung Kai Properties.
'I have their signatures [on the document],' said Kwok.
He said it was a legal contract, that cannot be unilaterally altered, cancelled or overridden by a new contract. Walter Kwok confirmed that he had received a letter from the family trust in 2010, informing him that he was no longer a beneficiary. He immediately expressed his objection and later went to the International Chamber of Commerce in Switzerland after failing to get access to view the latest holding of the trust in Hong Kong.
The family trust reorganisation announced on October 4, 2010, stated that a third of the shareholding of the trust was to be held for the benefit of Walter Kwok's family.
Walter Kwok's name was not included in the announcement. Thomas and Raymond Kwok are each beneficiaries of a third of the trust along with their families, according to the 2010 announcement.
A source close to the Kwok family yesterday said that family matriarch Kwong expressed her wishes in the 2010 reorganisation of the family trusts into three equal parts, including one shareholding for the benefit of Walter's family.
'Ms Kwong has not changed her wish to this date. Walter Kwok is believed to have obsolete documents, which were superseded by the subsequent reorganisation,' said the source. But the source did not explain the role of Kwong in the family trust.
Walter Kwok said the document signed among the three brothers remained a valid agreement between parties. 'It does not have an expiry date,' he said.
A legal expert said a protector is not empowered to remove beneficiaries, according to Hong Kong trust law. A trustee could remove beneficiaries but only subject to the intent of the grantor when he or she forms the trust, he said. A variation in the trust could occur with the consent of every adult beneficiary, the expert added.
On Tuesday, Walter Kwok said he was fighting for authority to view a document kept in Liechtenstein he believes shows the present shareholding distribution of the family trust.
Liechtenstein-based lawyer Thomas Wilhelm and his firm Codex have filed an appeal against allowing Walter Kwok to view the document.
Walter Kwok claims the lawyer represents his mother Kwong and his two younger brothers.
Thomas Wilhelm could not be reached for comment as of yesterday on an e-mail sent by the South China Morning Post regarding the court case and his representation.
The Kwok family has been advised by lawyers not to comment on the case. But sources close to the family reiterated that Wilhelm does not represent Thomas or Raymond Kwok or any other members of the Kwok family.
The court case is fixed for May 21 in Liechtenstein.
'I believe I will win the case and have the authority to view the document,' Walter Kwok said.